Our take: Stop the rate hike hokey-pokey

You've heard the old warning, "Be careful what you ask for, you just might get it" - right?

Well, it doesn't apply to companies that provide utilities such as water, gas or electricity.

If utilities were granted every rate increase they requested of public utility commissions, they would be profitable beyond belief.

Consider: If the Pennsylvania Public Utility Commission had granted the York Water Co. the full rate increases the company had requested dating back to 1999, local customers' bills would have gone up by a total of 110 percent.

Wow! We've seen some inflation since the late-'90s, but not that much.

Of course, the state PUC did not approve the full rate hike any of the seven times the water company asked for increases. Typically, the PUC approves a smaller percentage. In the case of York Water since 1999, the state OK'd rate hikes totaling 70.26 percent.

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Not as bad as 110 percent, but it probably still feels like water torture to customers. That seems like an enormous increase.

But history suggests it's unlikely this full increase will be granted.

In this file photo, two of the York Water Co.'s four settling basins are located on the left, with three flocculators to the right. Recently, York Water requested a 16.8 percent rate increase. (File)

This process is like a dance.

A utility asks for an increase. It submits boxes full of documents supposedly justifying that increase. The PUC sorts through it all and typically says, "We don't think you really need this much. Here's what we think is more reasonable and fair."

Sometimes a quick settlement is reached.

Sometimes the process drags on for the full nine months allowed by law - with hearings and public commenting and so forth.

State PUC spokeswoman Jennifer Kocher said typical rate cases cost a utility company about $1 million (which, yes, it can claim, as part of its need for a rate hike - though not always successfully). Ms. Kocher wasn't sure how much a typical rate case costs the PUC, but it's safe to say that fountain of money shoots pretty high (and yes, the PUC is funded by assessments of the utilities based on their revenues, and the utilities can apply to recover that cost from ratepayers as part of their rate cases).

So why do we go through this silly dance - which utility customers are paying for on both ends?

Why don't utilities ask for what they actually need to operate efficiently - with reasonable profits?

It seems pretty clear that they almost always ask for much more than they "need" - often nearly twice as much as is fair. If that weren't the case, they would all be bankrupted by the PUC's typical rate hike reductions. But they're not bankrupt. Most of them are quite profitable.

Is there some way to reform this haggling process - which looks more like "Pawn Stars" than a serious way to conduct state and utility business? Could utilities that ask for outlandishly large rate increases be penalized in some way - perhaps a way that can't be passed on to customers but rather must be paid by stockholders?

That's something for state lawmakers to consider.

Meanwhile, let's hope this most recent rate request by York Water is closer to 6 percent than 16 - or less.

Actually, do more than hope. Speak up and comment to the PUC. Customers have to be careful what their utilities ask for, because some day they just might get it all.

York Water Co. PUC rate hike requests:

· 1999: Requested 10.30 percent, granted 6.22 percent.

· 2001: Requested 11.10 percent, granted 4.35 percent.

· 2003: Requested 13.70 percent, granted 8.30 percent.

· 2004: Requested 22.10 percent, granted 15.79 percent.

· 2006: Requested 16 percent, granted 9 percent.

· 2008: Requested 21.37 percent, granted 17.90 percent.

· 2010: Requested 15.90 percent, granted 8.70 percent.

· 2013: Requested 16.80 percent, unresolved.

- Source: Pa. Public Utility Commission

This editorial expresses the opinions of the York Daily Record/Sunday News Editorial Board: